FDI cap: Congress readies to pay BJP back in the same coin

The Left, AIADMK and Trinamool Congress also likely to oppose FDI liberalisation

Raising of foreign direct investment (FDI) limits in multiple sectors, including in defence, pharmaceuticals, civil aviation and e-commerce in food, could be the government’s next parliamentary headache.

The Congress is planning to stonewall the government move and seek a detailed discussion on the issue in Parliament. “Party high command permitting, we will raise the issue energetically and forcefully. We will demand the Reserve Bank of India notification announcing the increase in FDI limits to be brought before Parliament,” said a senior Congress leader. The monsoon session is likely to begin on July 18.

Any notification issued by the government can be challenged in either House of Parliament within 30 days of the Cabinet clearing it. Although the Reserve Bank of India notified the FDI changes and corresponding changes in the Foreign Exchange Management Act in February (many elements of the liberalisation were part of the 2016-17 budget), they were brought before the Cabinet on June 21. The 30-day deadline ends on July 20.

In raising objections to the decision, the Congress will have supporters in the Left parties and the Trinamool Congress. The All India Anna Dravida Munnetra Kazhagam is opposed to 100 per cent FDI for trading, including through e-commerce, in respect of food products manufactured or produced in India. All these parties believe this is a move to allow FDI in the food retailing business through the back door.

In December 2012, Parliament sat till midnight when a motion backed by the Bharatiya Janata Party (BJP, then in opposition) and the Left parties in both Houses was debated, after the ruling United Progressive Alliance permitted FDI in multi-brand retailing.

On that occasion, BJP spokesperson Ravi Shankar Prasad said: "The notification has to be placed on the floor of the House for 30 days to allow members to see it, consider, think and submit modifications and disapproval amendments. It cannot be rushed through with the main debate on FDI."

At first, long wrangling led to the decision that FDI caps could not be raised by executive order and the opposition won the argument that the notification to raise these had to be cleared by the Rajya Sabha, where the government did not have a majority. If there were objections to the government's decision, Parliament needed to hear these.

In the monsoon session, therefore, the Congress is likely to do to the BJP what the latter did to it in 2012.

FDI WARS

• Congress planning to stonewall the raising of FDI limits in multiple sectors in Parliament
   
• Any notification issued by the government can be challenged in either House of Parliament within 30 days of the Cabinet clearing it
   
• Although RBI notified the FDI changes and corresponding changes in the Foreign Exchange Management Act in February, they were brought before the Cabinet on June 21
   
• The 30-day deadline ends on July 20
   
• Parliament’s monsoon session is likely to begin on July 18